Subscribe to our Weekly Edition

Main menu

Israel takes the lead in the cleantech revolution

The world may just be waking up to the need for clean technologies now, but Israel, with its scarce resources and need for independence, has been developing them for years. From communications to software, to semiconductors, to medical devices …

The world may just be waking up to the need for clean technologies now, but Israel, with its scarce resources and need for independence, has been developing them for years.

From communications to software, to semiconductors, to medical devices – Israel has been at the cutting edge of technology for the last 30 years, and it’s not about to miss the next revolution, in which technology will facilitate a cleaner, more sustainable world.

Global concern over a looming energy crisis, water scarcity and man-made climate change are driving a huge demand for clean technologies, which focus on preserving the earth’s resources – energy, water, air and soil.

Daily headlines highlight the brisk growth in renewable energy investment, new solar installations, water desalination plants, and biofuel developments across the globe. These emerging business opportunities combined with a governmental push (the Bali conference in December, EU and US energy legislation) have led to a boom in clean technologies in the last several years.

Israel at first glance may appear an insignificant player in the game, but actually has a lot to offer and to gain from efforts to promote clean technologies.

Located in one of the most arid deserts in the world, Israel has developed in spite of its severe water crisis. The country’s growing population and trend to urbanization require increasing water supplies on an annual basis, all the while water resources are shrinking. The Jordan river has been reduced to a trickle during summer months and the water level in the Kinneret Sea has dropped for four years. Even the underground aquifers are not being replenished quickly enough to quench Israeli thirst.

In order to combat this problem, Israeli entrepreneurs have developed innovative solutions over the last several decades. For example, Netafim, now a global irrigation company with hundreds of millions of dollars in sales, was founded to produce water-saving drip irrigation systems for the Israeli agricultural sector. Newer startups such as Atlantium (ultraviolet water disinfection) and AqWise (wastewater treatment) are popping up across the country to help solve various water issues, and older industrial companies such as IDE (desalination) are growing fast with increased projects in Israel and abroad.

Israel’s water technology companies are helped by several governmental support mechanisms, including Mekorot’s WaTech and the government’s IsraelNewTech, which support new startups with beta site opportunities and R&D funding, respectively. Additionally, research by Ben Gurion University, the Technion and Weizmann Institute has led to innovative technologies to address the crisis.

Alternative energy – particularly solar power – is also a huge focus factor for Israel. With little to no natural petroleum resources of its own, the country has been reliant on imported oil since its inception. As oil prices have tiptoed back and forth across the $100 mark and stability in supplier regions decreased (i.e., South America, several former Soviet Republics and the Middle East), Israel has begun to focus on energy independence as a political goal.

In this aspect, the country has one amazing thing going for it: the Negev desert. The southern half of Israel, 13,000 square kilometers, has more than enough sun to power all of Israel via solar power plants. Although that doesn’t look like it will happen anytime soon, there are significant efforts to produce sun-based energy in Israel. Companies such as Luz II and Solel (pioneers in concentrated solar thermal power plants), Pythagoras Solar (undisclosed solar photovoltaic technology), and SolarPower (solar solutions provider) are concentrating on bringing novel solar technology to the local and global markets.

The government has given its blessing to the efforts by passing clean energy friendly legislation, including the announcement of a feed-in tariff for solar-generated electricity, solar water heaters, and a tender for a 250 MW solar power plant, among others.

Meanwhile, others are concentrating on energy through other means. This includes Ormat, which developed geothermal power generation (using underground steam to power turbines for electricity generation) technology many years ago. Ormat successfully went public on the NYSE several years ago and has a significant share of the global geothermal power market.

After the government made it law, many years ago, that all new buildings install rooftop solar waters heaters, multiple companies were created to sell to the market. Installation of these solar water heaters has saved about three percent of overall energy usage annually and made Israel a world-leader in solar water heaters, with installations in 75% of households.

Perhaps the most publicized and recent development in Israel is Project Better Place (PBP), which plans to make electric vehicles a mass-market reality. The company, headed by Israeli Shai Agassi, is planning to initiate its first project in Israel. Through a three-way cooperation agreement between PBP, Renault-Nissan and the Israeli government, the partners plan to manufacture electric vehicles (Renault-Nissan), provide incentives to purchase them (government) and build the infrastructure to charge them (PBP).

The bold plan will reduce air pollution and, to the extent that the Israeli power grid moves increasingly to greener sources of power, it will help shift energy usage away from petroleum imports.

So one may ask, how did this happen? How did Israel end up with so much cleantech innovation and will it become a long-term leader in this field? Beyond Israel’s precarious energy and water situation, I believe the convergence of several key factors will bring Israel to the forefront of clean technologies and ensure that it remains a global leader in the space.

First, Israel has a history of very innovative and entrepreneurial individuals who can creatively solve the issues at hand. Many of them are experienced and successful entrepreneurs from the high tech sectors and are ready to apply the knowledge and lessons they have learned to the cleantech field.

Second, there is wide government support for new technologies to solve Israel’s water and energy problems, and robust cleantech-related research in Israel’s public universities and research institutions.

For decades, Israel has faced the energy, water and environmental challenges that every country in the world is now coming to grips with. It has been researching, developing and commercializing products to mitigate those problems for years. The country has the history, the entrepreneurs, the know-how, and the cooperation of universities, government and private interests necessary to make it a leading source of clean technologies.